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Black pudding principle

12 August 2014 / Rob Durrant-Walker
Issue: 4464 / Categories: Comment & Analysis , LLPs , The Goodies , Business , Partnerships

Ecky thump! Does the Revenue take inspiration from The Goodies in its approach to LLPs?

KEY POINTS

  • HMRC now have several measures that they can draw upon to combat the use of limited liability partnerships in perceived tax avoidance arrangements.
  • Loss reliefs can be restricted to: carry-forward; the amount of capital introduced; and monetary limits.
  • The rules relating to salaried partners can result in increased income tax and class 1 National Insurance contributions and may require a set-off arrangement relating to self-employment liabilities previously paid.
  • The loans to participators rules in CTA 2010 s 455 are extended to partnerships without exemption for commercially motivated loans.
  • Is a complete ban of corporate partners the next step? A recent discussion document notes that corporate directors are prohibited a principle that may be extended to limited liability partnerships.

It was ‘Kung Fu Kapers’ ...

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